Professional indemnity insurance (PII) premiums for the top 100 law firms look likely to remain flat for 2009/10 despite a slight increase in claims, insurance broker Marsh said today. Insurance bills for small firms, however, are likely to rise significantly.

Marsh, which claims it brokes PII for 34% of the top 100 firms, estimated that premiums could rise by up to 5% in some cases, but that most big firms would pay the same rates as last year.

Though Marsh does not as a rule insure firms of four partners or less, said Andrew Jackson, managing director in Marsh’s UK PI practice, insurers will increase premiums drastically for small firms because insurers made heavy losses last year.

However, he said these increases might help the market overall. ‘It’s possible that as those [premium] rates increase, other people will want to make a profit, so new insurers could enter the market,’ he said.

Sandra Neilson-Moore, European practice leader for law firms’ PI at Marsh, agreed that intense competition for larger firms’ business meant that insurers would not generally increase premiums for those firms.

Jackson said insurers are asking for more information – such as in detailed questionnaires – than ever and that many were considering moving away from insuring conveyancing firms.